Q4 2023 Orthofix Medical Inc Earnings Call
Participants
Massimo Calafiore; President and CEO; Orthofix Medical, Inc.
Julie Andrews; CFO; Orthofix Medical, Inc.
Louisa Smith; Vice President; Gilmartin Group LLC
Mathew Blackman; Analyst; Stifel Nicolaus and Company, Inc.
Ryan Zimmerman; Analyst; BTIG LLC
Jason Wittes; Analyst; ROTH MKM
Presentation
Operator
Good afternoon, and welcome to Orthofix Medical's Q4 and full year 2023 earnings call. All participants are in a listen only mode. After the speakers' remarks will have a question-and-answer session. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the call over to Louisa Smith, Vice President of Gilmartin Group Thank you.
Louisa Smith
Please go ahead and good afternoon, everyone, and welcome to the Orthofix Fourth Quarter 2023 earnings call. Joining me on the call today are President and Chief Executive, Massimo Calafiore; and Chief Financial Officer and Julie Andrews. During this call, we will be making forward-looking statements that involve risks and uncertainties. All statements other than those of historical fact are forward-looking statements, including any earnings guidance we provide and any statements about our plans, beliefs, strategies, expectations, goals or objectives.
Investors are cautioned not to place undue reliance on such forward-looking statements as there is no assurance that the matters contained in such statements while incurred forward-looking statements we will make on today's call are based on our beliefs and expectations as of today, March fifth, 2024. We do not undertake any obligation to revise or update such forward-looking statements and some factors that could cause actual results to be materially different from the forward-looking statements made by us on the call include the risk factors disclosed under the heading Risk Factors in our Form 10-K filed this afternoon, March 5, 2024 for the year ended December 31, 2023, as well as additional SEC filings we make in the future.
In addition, on today's call, we will refer to various non-GAAP financial measures. We believe that in order to properly understand our short-term and long-term financial trends, investors may wish to review these matters as a supplement to the financial measures determined in accordance with U.S. GAAP. Please refer to today's news release announcing our fourth quarter and 2023 results for reconciliations of these non-GAAP financial measures to our U.S. GAAP financial results at this point, I will turn the call over to Massimo.
Massimo Calafiore
Thank you, Lisa, and thank you, everyone, for joining us this afternoon for my first quarterly earnings call and also big CEO. I'll begin by saying how happy I am to be part of Orthofix and this impressive organization. The Company has strong fundamentals, and I believe there's great potential for future value creation. This is why I joined Pacific. Yes, the company has been through much change in the last 12 months, but our business fundamentals have remained strong and our talented leaders and committed employees have executed exceptionally well.
Fourth quarter performance was no exception. We executed against our guidance, gain momentum and accelerated strategic initiatives despite that predictions. Otherwise, we also expanded our distribution network it in our USA spine sales channel. I'm so pleased to be part of the Orthofix team and that will more to build on past successes to leverage our current momentum and unlock future value-creating opportunities.
During the last eight weeks, I've had the chance to speak to many stakeholders, and I'm more encouraged than ever about the opportunity for growth and value creation that is in front of us. I joined Orthofix having in mind the company and its innovative solutions. And my LTE sites have a firm does long-held beliefs. I want to spend some time on this call sharing my initial thoughts and observations about our business and highlighting some areas we prioritize throughout the year. Then I'll turn the call over to Julie to provide a more in-depth look at our fourth quarter performance and financial results.
First and foremost, idled centers that the company has remained stable throughout the recent periods of transition, demonstrating our durable business model. I have spent a great deal of time and understanding internal operations as well as how our fixed fees into the markets where we are competing I'm confident in our fundamental strategy of cross-sells to Predix spine, biologics and Bone Growth Therapies.
There should be no misgivings about the ability of this Company to serve the evolving clinical needs of surgeons and patients while also delivering strong growth combined with improved operational efficiencies, we've been funding well throughout 2023, gaining market share and maintaining a relationship with our partners, disruption and consolidation within the spinal market specifically have created commercial opportunities in spine and orthopedics.
We have taken advantage of these opportunities continuing to build out our network. I want to quell any notion that Orthofix is losing distributors. We are adding a high value relationship. One, optimizing our existing sales channel in the fourth quarter on 8% of all USA spinal implant sales were attributed to new distributors salon. Additionally, it's important to note that our merger thesis remains intact. We last January's business combination Orthofix together uniquely complementary best-in-class portfolios to create a compelling product platform across spine and orthopedics.
We are well positioned to capture value with these specialized market, and they have already seen the inherent cross-selling benefit of being able to leverage our portfolios as a whole, I want to highlight data spine surgery progresses towards data-driven solutions company made in detecting changes in the operating group, translating a surgical plan into reality requires real time information with the flexibility and tools to adapt. Also fixed is a leader in this space, and we plan to fully leverage the 70 flash navigation system in color. The growth within our orthopedics and spine segment has been supported by a 29% increase in our global 70 installations over the past year.
We continued investment in our next-generation advancements in enabling the collagen hub where we build upon this unique foundation and establish us as the partner of choice for surgeons seeking real-time data and remaining integrated solutions in orthopedics and spine. The merger between arms are fixed and SeaSpine also created a biologics business unit with best-in-class products in three of the most significant bond substitute segments around foam mattresses demineralized bone matrices, a synthetic bond substitutes that breadth of our biologics portfolio and able Orthofix to meet surgeon preference and procedure specific requirements. Furthermore, biologics is a capital-efficient unit, ultimately driving cash and EBITDA gains for the Company.
As it relates to platform synergies, biologics remain an integral part of our overall spine and orthopedics, our strategy, Kevin, we did the diverse of the review with the associated clinical data to broaden the IDN and GPO access that helps attract and retain fine distributors.
Moving to Bone Growth Therapies or BGT business is well positioned to continue growing the market and take share. We have the industry's only cervical indication and are the only company to offer both live boost and payment solutions or structure of dealing in addition, the opportunity to support acute trauma with our direct sales team solution is propelling the growth diabetes franchise to well above market throughout the 2024. We expect to accelerate the cross-selling of BGT through our spine and orthopedics sales channels.
Clear subpoenaed business has an impressive portfolio and pipeline of highly specialized internal and external solutions for complex limb reconstruction and deformity correction. It is uniquely positioned to lead pediatric and adult deformity correction, and we are just starting to tap into its potential within the United States. Additionally, we have recently rolled out our Phoenix, our case planning software platform for use with our orthopedic products. We'll be expanding our StorNext applications to incorporate many of our product platform across segments.
Moving to the three priorities for 2020 for First off, our mandate is to grow the Company and growing profitability. A key part of the merger thesis was to combine SeaSpine innovative growth engine with the capital efficiencies of Orthofix throughout 2023, we have been able to do just that we have sequentially improved the adjusted EBITDA every quarter, and we are effectively managing cash flow to exit 2020 for cash flow positive. We believe that profit of our growth will be a key differentiator for our topics amongst our peers and will ultimately be a driving force in creating shareholder value.
We will also strive to a growth of overall cost mindset, and we intend to use to monitor or to fix greatest trends and my second key area of focus our balanced portfolio platform to accomplish that goal, as stated, because a competitor already is to further leverage our technologies and sales channels across all product segments. We are not a pure play spine company nor our commodity products of this company. Rpx occupies a unique corner of the end market itself, and we intend to highlight the entire portfolio platform as the key driver of content and market share gains.
In addition, we believe that enabling technology is critical in positioning us for long-term sustained growth and future success capabilities of 72 redefine image guided surgery within spine and orthopedics is an increasingly important aspect of how we fuel growth. And due to that, the obligation of the fund to expand the indication for our B2C business, layered in with the integration of a surgeon preference market for biologics across spine and orthopedics, the complementary nature of our portfolio becomes even more evident our products work together to create a best-in-class offering, each improving the performance of the other and enabling growth through cross-selling opportunities.
And finally, the third priority is our commitment to innovation. As I just noted, 7B is a key contributor to our growth engine. We have a vision that's a combination of 7D with our spinal hardware. We strengthened our position in selected market segments, especially spine deformity, where we expect to emerge as a formidable content there. We will also continue to commit the resources developing high value initiatives that will enable profitable growth and market share gain is, I think, years the decision to invest more heavily in BGT. by seeking a price product through indication, product sell steam as it relates to unprecedented growth in the franchise.
We can deliver the four consecutive quarters of double digit growth and reduction in BGT. is a direct result of reallocating investments to a high growing business seamlessly the investment in the peak on platform at the best-in-class through our pursuit of growth framework platform on driving growth well above historical norms for the business, a current and planned pipeline within orthopedics should take this business to a market leading position in complex linkup automated collections. We will continue to invest strategically across the entire portfolio and put the resources behind products where we can create or deepen market segment and drive above market growth without profitability.
To the bottom line, I'm very pleased with the team's performance in the last several months and incredibly encouraged by my initial findings. Orthofix is on very solid footing and anticipate being able to share increasingly meaningful updates about key opportunities as we move into the next chapter of our story. With that, I will now turn the call over to Julie for further detail on our fourth quarter and full year results.
Julie Andrews
Thank you, Massimo, and good afternoon, everyone, plus Massimo. I'm very happy to have joined Orthofix at this important time and look forward to contributing to the Company's future success. Before I begin, I'd like to remind you to please refer to our press release published earlier today for information regarding our non-GAAP results, including reconciliation of these results to our GAAP results. Additionally, all percentage changes discussed will be on a year-over-year basis and revenue growth rates will be on a pro forma constant currency basis unless otherwise noted. In addition, all results of operations that I referred to in my prepared comments will be on a non-GAAP as-adjusted basis and comparisons to prior year will be on a pro forma basis, increasing the combined results of Orthofix and SeaSpine in 2022, unless otherwise stated, starting in Q1 from will annualize the impact of the merger and no longer refer to pro forma growth.
As noted earlier in the call, Orthofix finished the year with a strong fourth quarter. Operating performance remains on track, and we were pleased to deliver net sales above the high end of the range provided in our third-quarter call for my commentary, other three, each of our business units and review financial results on this quarter and for the full year, as well as provide guidance for 2020 for the total Company net sales were [$200.4 million] in the fourth quarter of 2023, up 6.9% over prior year. For the full year 2023, net sales were $746.6 million, growing 8.1% on a pro forma constant currency basis and normalizing for a one-time stocking order that occurred in the third quarter of 2022 prior to SeaSpine exit from the European market Bone Growth Therapies revenue grew 15.3% to $58.8 million in Q4 and delivered 13.5% growth for the full year 2023.
The fourth quarter marked four consecutive quarters of double-digit growth for the BTT franchise This growth was driven by above-market performance in both the spine and fracture channel. We are seeing great performance with the Excel stem product and from our continued investment in a focused sales channel for the fracture market with growth of 23.6% in the fourth quarter. And fresher bucket is a $200 million plus market and we are just getting started global spinal implants. Biologics Enabling Technologies grew 4% this quarter and 6.3% for the full year 2023, as mentioned above, when normalizing for a one-time stocking order that occurred in the third quarter of 2022 prior to the planned exit from the European market. Us Spine Fixation revenue grew 13.5% in the quarter, which is well above market growth rates to clarify does exclude motion preservation is a metric we will be providing in future quarters as we saw on Q3.
The performance was driven in large part by more exclusive distributor partnership Cross contract assets and an increased focus on cross-selling. New distributor partners added since July 2023 contributed approximately 8% of revenue for U.S. spinal implants in Q4, we are pleased that we have been able to maintain existing and build new relationships with our key distributor partners and model Orthopedics business grew 2.7% in the fourth quarter and 5.2% for the full year. Full year growth was led by the US was 11.1% growth driven by strong performance with unusually Lucky evo and our trauma solutions as well as distributor expansion and sales channel investments that were made in 2022 and 2023 and best-in-class surgeon education permanent.
Now moving on to some detail below the sales line. Beginning with our Q4 non-GAAP adjusted gross margin, we delivered 72.2% for the quarter, a 330 pro forma basis point improvement over Q4 2022. For the full year, non-GAAP adjusted gross margins were 71.4% compared to 68.7% for the full year 2022, a 270 basis point improvement on a pro forma basis increases were primarily due to product mix due to differences in allocation methodologies and classification of operating expenses between legacy Orthofix and legacy SeaSpine. Prior year pro forma numbers are not available as a result of this.
My comment on line item. Operating expenses will be on a GAAP basis for both Q4 and full year 2023 compared to GAAP results for the prior year. Gaap sales and marketing expenses were 48.8% of net sales for the fourth quarter and 51.7% for the full year 2023 compared to 48.5% and 49.7% of net sales for Q4 and full year 2022, respectively. The increase in GAAP sales and marketing expenses for the quarter and full year is primarily driven by integration related severance, retention costs and stock-based compensation associated with the merger and higher commissions as a result of the achievement of certain sales objectives. Gaap general and administrative expenses were 17.2% of net sales for Q4 2023, down from 20.8% in the same quarter prior year.
The decrease is due to merger-related synergies, a reduction of stock-based compensation and a lower level of one-time merger related costs, partially offset by legal and investigation costs during the quarter. For the full year GAAP, general and administrative expenses were 19.4% of net sales, up from 17.4% for the prior year. This increase is due to merger and integration related expenses and an increase in share-based compensation due to the merger and legal and investigation costs. Gaap R&D expenses were 9.5% for the quarter compared to 10.8% for the prior year quarter. The decrease in GAAP R&D expenses was primarily driven by lower spend related to EU MDR readiness and realization of merger-related synergies, which were slightly offset by higher stock-based compensation expenses.
Gaap R&D expenses for the full year 2023 or 10.7%, which was flat to prior year. Merger related synergies were offset by severance and retention expenses related to the merger and development milestone payment that was achieved during the year. For the quarter, non-GAAP adjusted EBITDA was $19.6 million or 9.8% of net sales, a 96% increase over Q4 2022 on a pro forma basis. For the full year, non-GAAP adjusted EBITDA was $46.3 million, our 6.2% of net sales, a 230 basis point improvement driven by higher gross margins and merger-related synergies. This represented a 41% drop-through on incremental revenue. We are encouraged by these results as we are seeing the impact of merger-related synergies materialize.
From a cash standpoint, our total cash balance, including restricted cash at the end of Q4 was approximately 37.8 million. During the fourth quarter of 2023, we entered into a four year $150 million financing arrangements. And as of the end of the year, we had $100 million in borrowings outstanding. Under this arrangement. We subsequently borrowed an additional $15 million in January 2024. Overall, we are pleased with our fourth quarter and 2023 results. The division showed resilience during a time of transition with growth across all business lines, demonstrating the strength of our portfolio. We substantially improved adjusted EBITDA every quarter and exited the year with adjusted EBITDA expansion of 440 basis points as we saw the realization of cost synergy does give us confidence in our ability to deliver profitable revenue growth as we move into 2024.
Now moving on to 2024 full year guidance, we are providing guidance for full year net sales to range between 785 and $795 million, representing an implied growth of 5% to 7% year over year on a constant currency basis. Please note our expectations are based on the current foreign exchange rates and do not account for rate changes that may occur throughout 2024, our outlook for full year 2020 for non-GAAP adjusted EBITDA of 62 to $67 million. From a non-GAAP adjusted EBITDA perspective, we expect to deliver approximately 8% EBITDA margin, which represents 42% drop-through of 2024 incremental revenue at the midpoint of our guidance.
Our 2024 non-GAAP adjusted EBITDA guidance represents more than 400 basis points of EBITDA margin improvement over the first two years 2023 and 2024 post-close of the merger. This is a result of the $32 million in annualized synergies we have achieved to date and the progression toward delivering $50 million in synergies three years post close of the merger. It is also worth noting that we will no longer be adjusting our MDR related expenses as the initial wave of implementation is complete, and we believe the current cost represents the ongoing expense to remain in the European market.
And finally, we are reiterating our commitment to exit the fourth quarter of 2024 being cash flow positive. While we are not providing quarterly guidance, I do want to provide you with some directional comments on the expected cadence of our business to assist you in modeling our quarterly performance, we expect Q1 and Q2 revenue be slightly below our full year growth guidance range due to the timing of stocking orders in 2023. Additionally, we expect Q3 to reflect the highest year-over-year growth rate due to disruption in prior year as we close the quarter.
Now for some specifics on the individual line items on the P&L. First, on gross margin for 2024, we are expecting gross margin to be in the 71% range in line with 2023. We expect operating expenses to decrease approximately 200 to 300 basis points due to leverage on incremental sales and additional cost synergies before we move to line items below the operating income line. To assist you with modeling EBITDA, I want to provide you with our outlook for depreciation expense, which for the full year 2024 in the range of approximately 36 to $37 million as compared to $33 million in 2023. Stock-based compensation expense is anticipated to be in the range of $30 million to 32 million.
Now let's touch briefly on the items below the operating income line. Our expectation for interest and other is approximately $5 million per quarter. We expect our adjusted EBITDA margin improvement of 200 basis points to be weighted more towards the first half of the year. As we annualize prior year synergies, we expect the bulk of our remaining synergies to be focused on gross margin improvement and be realized during 2025 to touch briefly on cash. We anticipate cash used to be front end loaded with the magnitude of investment in Q1 with Q2 stepping down relative to Q1 and the second half of the year progressing toward breakeven with Q4 Essity competence.
In 2023, we had approximately $108 million of cash for operating and capital expenditures, a significant portion of that was driven by one-time merger-related expenses and outsized investment in inventory and instrument sets to drive above market growth in US Spine Fixation, which we are realizing our ability to utilize these assets to drive growth in 2024 and beyond, underlie our belief that we will exit 2020 for cash flow positive. At this point, we will open the line for questions.
Question and Answer Session
Operator
(Operator Instructions) Mathew Blackman, Stifel.
Louisa Smith
All right.
Mathew Blackman
Good afternoon, everybody. Thank you so much for taking my questions. Maybe Massimo, to start with you. I mean, just help us understand what your marching orders are from the Board and what's on the table and what's not in terms of your ability to drive value creation here, divestitures, more M&A, et cetera? Just any help there. And then I've got one follow up for Julie.
Massimo Calafiore
Yes, thank you. Thank you, Matt, for the question. Look, the marching order than right now is to create value for the company and focus on profitable growth. So my team and I about my team and I would be solely focused right now on driving the Company and the creating, I would say, accelerating market growth. That is the optimal opportunities are out there. And really take care of the full portfolio that we have been on.
And also fixed is not just a fine company. We have a lot of levers to use in spine biologic, orthopedics, PGT. and actually enabling technology. So but already iterating what based on what I said in my remarks, good profitable growth and value creation, leveraging the full portfolio and keep working on innovation, leveraging our great technology that we that we have in 70. So right now, focus on execution.
Mathew Blackman
Got it. I appreciate that. And Julie, if I'm looking at it correctly. I think that 2023 MDR. add-back was about $9.5 million. Is that right? And does that mean we should be looking at this 24 guidance and sort of on an apples to apples basis approaching mid 70 millions. Is that sort of the right way to think about it? And then if I could just tack on there would be helpful if you could. Can you just describe your guidance philosophy in general? Are these ranges and the ranges you'll provide in the future? It ranges. You have high conviction in meeting and there's some upside or no, we should take literally just help to help us frame that. And then I'll get back in queue. Thank you.
Julie Andrews
Sure. Thanks, Matt. Yes. So the MDR expenses for 2023 were it more 9.5, and we expect that to ramp down. I think our expectation is that it ramped down to around $3 million, and that's kind of the ongoing run rate that we'll see in the business. So if you think about that, that's included in our adjusted EBITDA guidance going forward.
And in terms of philosophy on it on guidance, we set the guidance at a number that we are confident and we believe that we can deliver and that's our commitment. We want to be prudent. Massimo and I are both two months into the job that our estimates are informed what we see in the pipeline and you have also tried to provide some parameters around the quarterly cadence as well. But we believe we've said it, we were confident that we can execute against that strategy.
Mathew Blackman
Thank you so much.
Operator
Ryan Zimmerman, BTIG.
Ryan Zimmerman
Good afternoon. Can you hear me okay?
Massimo Calafiore
Yes.
Ryan Zimmerman
Hey, guys. First off, congrats on your first quarter here at Orthofix on first earnings call. I should say I wanted to I got a bunch of questions. I want to follow up on one of Matt's, but I want to start maybe with some segment expectations. And Julie, I really appreciated all the color you gave on Q3 pacing and so forth. But do you think about kind of the business segments.
And specifically within that, when we think about kind of legacy SeaSpine versus legacy Orthofix, I mean the spine business at SeaSpine was kind of putting up, you know, kind of low double digit type numbers and you're guiding the five to seven. I'm wondering kind of how that splits out in terms of kind of your expectations for growth, be it VGT. or orthopedics versus the core spine? Any commentary there would be would be appreciated. And I have a couple of follow-ups.
Massimo Calafiore
Thank you. Sure, Ryan. So we're not breaking out specific product line guidance today. So yes, but I think generally speaking, you can we talked about US spine fixation market or our growth at 13.5% for the quarter. And so we feel really good about that. But we're not breaking out specific line item guidance. The focus turn of debt incurred much more the U.S. and Caribbean in the longer perspective, I'll keep rolling on certain.
Ryan Zimmerman
So I want to ask another question, which is about segment profitability. And if you look in the 10 K, you can see where most of the profits coming from from a segment perspective, and there's not a lot of profit coming from orthopedics on why why remain committed to that business at this point? And what can you do so if you actually drive that growth higher and frankly, is it worth keeping that business given the profitability? It is ascribed to the Company?
Massimo Calafiore
Yes, we did do that. During quite some but not administered environment. One foundation of feed off of each in orthopedics is the DNA of the organization. And if you think of that business is structured right now it's totally skewed on in Europe where we where we are not at a level of maturity that is very, very high. I think what we see in front of us is an enormous opportunity in United States where we have when we have a very small market share. So there is a lot of focus investment and the right now we are making in this specific market, not just around the marketing and sales, but also innovation.
So what was the what you should expect that over time with the market, let's say we if you start to share the market between United States and Europe with the United States market, it grows much faster. You will see automatically a much higher profitability. So as I say we are very excited about all of the opportunities. The opportunities that we have in all of the different market segments that are strategic is one of them.
Understood.
Ryan Zimmerman
Appreciate that and if I could squeeze one more in just a follow-up to Matt's question, Julie, if I look at kind of operating expenses dropping 200 to 200 basis points, I think it's in the range around six can maybe call it two, if let's say euro MDR costs come down a little bit, where else do you feel like you have opportunity to kind of manage those costs? And and just your thoughts there would be appreciated.
Julie Andrews
Yes. So we're going to be still annualizing our synergies that we achieved in 2023 and we talked about last year that the majority of that was coming from headcount. So we'll see that go down in 2023 or excuse me, 2020 fourth, we fully annualize those come. In addition, no part of it is creating leverage on our incremental revenue growth where we don't believe that we need to invest at the same rate G. and A. and R. and D. were holding flat to revenue. So that's what we're looking at for two our leverage points.
Ryan Zimmerman
Okay. Well, thank you both for taking the questions. Have much appreciated steroids.
Operator
(Operator Instructions) [Destiny], Ladenburg Thalmann.
And hi, this is actually Destiny on for Jeff. Thank you for taking the questions. I wanted to quickly talk about the BGT. segment. Can you describe some of the drivers that are really helping you grow within this growing market and how your growth rate is comparing to the overall market and a special shout out to Jason for getting a promotion. Do you see him adjusting the strategy? Are you as part of your marching orders that was previously asked? Is it BGT. growth really central to it.
Massimo Calafiore
Look, this is a great question. You know like we are very excited about this segment for you, but for many reasons that I'm sure that got familiar with. But if you see how the BGC. businesses divided we have, we have market leadership, but market leadership in spine where we have not just an advantage from the technology perspective, but also from the infrastructure perspective, I think what to what Jason did and the team has built up a great system to convert all of the orders that we have to cash. So the idea is that, okay, how can we bring all this know-how that we have on the free market.
And then right now we are focusing on the fracture market where we have a very, very good opportunity right now with a very small market share. And so you will see us really focus on their fracture, keep growing well above market and saying, let's say, all of the EBITDA and the gross margin, the positive that we see from VGT. So let's say, a great, a great focus let's say, our great focus on creating value on additional market and spine right now.
Excellent. Okay. And then Julie, one for you. I really appreciate the commentary around the synergies, especially on the top line and how it'll affect adjusted EBITDA. I'm wondering if you could just give us an update on the current headcount and how the Cinergy's impacted that.
Julie Andrews
So I think most of the headcount action was taken last year and we don't expect to have much more headcount impacted or more headcount impacted this year. You can see in our K I believe our headcount numbers, that local area there hasn't been excellent.
That does it for me. Thank you.
Operator
Jason Wittes, ROTH MKM.
Jason Wittes
Hi. Can you hear me now? I apologize, but it goes muted flow accumulators and yes, we can hear. Okay. Thank you. Very much. I just I know you're not giving line-by-line guidance by division, but if the numbers do look somewhat conservative, is this just a reflection of sort of I think your stated goals not only started, which were, you know, profitable growth versus growth, high growth or growth, but with heavy investment, is that the way should we think about it? Or is it just a combination of conservatism, just conservatism, but generally speaking, the business trends look pretty good.
Massimo Calafiore
Yes, indeed, this is Giuliano. I'll take that. Our business trends look good. We're expecting all of our businesses, while we're not giving line item detail to grow at or above market. And you know that, like I said earlier, Massimo and I are two months into the job. We want to set guidance where we have confidence that we can execute against that and deliver on that commitment. And that's what we believe we've done.
And with the guidance that we've provided. Understood. And then I don't know if you said it mentioning on 70. Could you give us some color in terms of placements or sort of what the outlook is for 17.
Jason Wittes
And as Julie said, we're not giving, let's say right now a specific forecast for market segment. But as said, asset during something is important to notice that 17 has been a great contributor of the of the success of the spine franchise. Even last year like we had it, we had 29%. If I remember of the overall revenue that came from from 70. And you know that all of the all our competitors have been successful, leveraging the enabling technology and that you will see us really focus on a platform that is unique in the marketplace. So we are pretty excited about the contribution of 17 to eight with three, okay, there of what we can achieve together in 2024.
Massimo Calafiore
Okay, thanks. And maybe just one follow-up. I know you kind of addressed this, but I'm just curious kind of what the outlook is and that is on distributors it sounds like it's stable and you're adding. Can we anticipate that you'll continue to add high-quality distributors throughout the year, especially particularly in spine?
Get? Yes.
Julie Andrews
Thank you for the question. Look, there's a lot of excitement about what we're doing today around spine and orthopedics, and we have a very healthy pipeline. So I'll expand market. I always go to fluctuation. You'll see it as you see what's happened in the US a few years back right now, given the recent mergers, there is even a greater opportunity of reps and distributors to distributor to go get scope. We are fully capitalized to do that.
And the annualized results on Q4 does just to show that the thesis of the price of our product is there so I think towards the year you see, yes, we will be able to keep adding high-quality assets to the distributors that is Ghana that marries our vision around what we want to accomplish in OpEx, so out of deal of opportunities out there.
Jason Wittes
Wonderful. Appreciate the color. Thanks. I'll jump back in queue.
Julie Andrews
Yes, and just to amplify and thereby on what Massimo said, we had 25% revenue growth and enabling technology last year in Q4.
Operator
I'm sorry, we have no further questions. I would like to turn the call back over to Massimo Calafiore for any closing remarks. Thank you.
Massimo Calafiore
Look, I said earlier I close today by reiterating my enthusiasm to be part of Orthofix and my optimism about the company's future my first two months have really underscored the stability, lots of expanding the fundamentals and the breadth of portfolio offering. I would also to thank all of our employees worldwide for their commitment to Orthofix and their initiative in maintaining momentum across our whole portfolio. We are going to continue building a high dynamic organization dedicated to collaboration, innovation and passion of patient care 2024 will be a great opportunity for growth and value creation, and I look forward to providing more granularity on specific initiative initiatives in future updates. Thank you.
Operator
This concludes today's conference call. Thank you for your participation. You may now disconnect.
